THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(BEGIN VIDEOTAPE)HOWARD KURTZ, HOST (voice-over): Palin and the pundits. The media verdict: Sarah Palin did far better against Joe Biden than with Katie Couric. But do journalists care that Palin ignored many of the debate questions? And did Gwen Ifill silence her critics with her performance?

The price of candor. The conservative columnist who called Palin an embarrassment and was showered with abuse.

Man in the middle. Bob Schieffer on the pressures of moderating the final presidential debate next week.

Plus, the vote that sunk the markets. Covering the congressional crossfire over the diving Dow.

(END VIDEOTAPE)

KURTZ: Perhaps never before in the history of political debates has media interest been so intensely high and the bar set so absurdly low. Would Sarah Palin fall on her face? Would she stumble as she had with Charlie Gibson, freeze up the way she did with Katie Couric?

Journalists were giddy with anticipation as the rookie from Alaska prepared to take on Joe Biden. And let's face it, she did not have a deep and detailed command of the issues, but she turned in a command performance.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: Go to a kid's soccer game on Saturday and turn to any parent there on the sideline and ask them, "How are you feeling about the economy?" And I'll bet you you're going to hear some fear in that parent's voice.

Now, doggone it, let's look ahead and tell Americans what we have to plan to do for them in the future.

Here is shout-out to all those third graders at Gladys Wood Elementary School. You get extra credit for watching this debate.

(END VIDEO CLIP)

KURTZ: And that apparently is all it took. The pundits turned into theater critics, and most of them applauded the Sarah show.

(BEGIN VIDEO CLIP)

KATIE COURIC, CBS NEWS: Perhaps the headline is Governor Sarah Palin did not embarrass herself or her running mate.

CHUCK TODD, NBC NEWS: Those that were tuning in, looking for some sort of car wreck, probably came away disappointed.

GEORGE STEPHANOPOULOS, ABC NEWS: She beat expectations and she stopped the slide.

PEGGY NOONAN, "WALL STREET JOURNAL": She killed. It was her evening. She was the star.

She had him at, "Nice to meet you. Hey, can I call you Joe?"

RACHEL MADDOW, MSNBC: She was certainly very folksy, but almost in a frenetic, cartoonish, gimmicky way.

PAUL BEGALA, CNN CONTRIBUTOR: She now has at least gone from being a national punch line to being, you know, maybe at best, neutral to the ticket.

(END VIDEO CLIP)

KURTZ: The public didn't necessarily agree. An instant CNN poll finding that Biden won the debate by a 15-point margin.

Joining us now to talk about the coverage of Palin, Biden and the VP debate, here in Washington, Dana Milbank, columnist for "The Washington Post" and a CNN contributor. And Amanda Carpenter, national political reporter for townhall.com.

Dana Milbank, let's face it, journalists were expecting a lousy performance. Palin turned in a pretty good performance, leaving the issues aside for a moment.

Is that all it takes to get a standing ovation from the media?

DANA MILBANK, CNN CONTRIBUTOR: Doggone it, you betcha. Can I call you Howie?

KURTZ: Go right ahead.

MILBANK: I think so. I mean, Sarah Palin was benefiting from the soft bigotry of low expectations here. And people who had been watching Katie Couric, watching Tina Fey, tuned in and said, wait a second, she actually speaks English. I mean, all right, so the grammar is not perfect, but she speaks English.

And I think there was -- in a way, she got better coverage because of that, whereas if just ordinary people out there in America who hadn't seen Tina Fey and hadn't seen Katie Couric tuned in and said, ooh, I'm not so sure about this.

KURTZ: So, after the Katie interviews, which we'll get to a little later, did journalists just misunderestimate her as somebody who was going to come out and babble?

AMANDA CARPENTER, NATIONAL POLITICAL REPORTER, TOWNHALL.COM: Yes, I think so. Sort of strange. Going into a big, high-stakes event like this, a lot of candidates deliberately try to lower expectations. And over on Town Hall (INAUDIBLE), who knew all you had to do was sit down and give a bad interview with Katie Couric? I mean, really...

KURTZ: You're suggesting it was deliberate?

CARPENTER: Well, if it was, it was brilliant. But going into the debate, if she would have performed like she did and people hadn't seen that Katie Couric interview, and she was kind of fumbling over answers, not directly answering some questions, she would have gotten much worse reviews. I mean...

KURTZ: But how is it that the pundits have all been yammering about Sarah Palin, but these polls show that -- at least if you believe instant polls -- that the public favored Joe Biden?

MILBANK: Well, and it's because of that bifurcation. It depends on if you had all these preconceptions before that obviously lowered the bar down to the floor. She just had to step over it. But if you didn't have all of those preconceptions, let's face it, 80 million people or whatever are watching this debate. Most of them didn't see the Katie Couric interview, most of them didn't see...

KURTZ: Or read all the news analyses and all that.

MILBANK: Right. And so they're just looking at it straight on. They said, well, this guy seems to have a lot of experience and she seems to have some folksy phrases to say.

KURTZ: All right. Well, let's take a little look at a little bit more of the debate starting with Senator Biden.

(BEGIN VIDEO CLIP)

SEN. JOSEPH BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: All you've got to do is go down Union Street with me in Wilmington and go to Katie's restaurant, or walk into Home Depot with me, where I spend a lot of time. And you ask anybody in there whether or not the economic and foreign policy of this administration has made them better off in the last eight years. And then ask them whether there's a single major initiative that John McCain differs with the president on.

PALIN: Say it ain't so, Joe. There you go again pointing backwards again.

(END VIDEO CLIP)

KURTZ: Now, that was the strategy, but Sarah Palin did not respond to many of Biden's criticisms. She also got some facts wrong. Biden got a few wrong. She misstated the number of troops in Iraq.

I have been stunned, with some exception to CBS and NBC, who did some fact-check pieces, by the media's lack of interest in the substance of this debate.

CARPENTER: Yes, it was interesting. I do want to talk about the questions she didn't answer. One was on bankruptcy law that was fairly complex. Health care, I think the other one is bank deregulation. And she was obvious in the way that she answered it. She goes, well, I'm not going to answer the questions the way that you asked them. And I'm going to talk about what I want to talk about.

And, you know, as a former college debater, it's good to not say things that aren't true and just talk about something you do know about.

KURTZ: Right, but you don't...

CARPENTER: But you can't get the win for not answering questions.

KURTZ: Yes. Don't you get points deducted for ducking the substance of your opponent's argument.

MILBANK: You know, I think never before in a campaign have we had so much fact-checking going on. Everybody has got their fact-checker, every newspaper, TV. And so much time is being devoted to it. And I think more than ever, the campaigns are just ignoring it.

KURTZ: Well, I'll tell you what, on cable TV in particular, they're not all that concerned with fact-checking. In other words, it might be a two-minimum segment, but it took 24 hours...

MILBANK: Right. If you just...

KURTZ: Well, she said, call me Joe.

MILBANK: If you keep repeating it, I mean, a lie gets halfway around the world, as Mark Twain, said while the truth is putting its shoes on.

KURTZ: All right.

Well, now, this technique of Governor Palin's, of not necessarily responding to the questions, or the rebuttals by Joe Biden, got a bit of attention from the inevitable skit last night on "Saturday Night Live."

(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")

TINAY FE, ACTRESS: Gwen, we don't know if the climate change, whosey, what's it, is manmade, or if it's just a natural part of the end of days. But I'm not going to talk about that. I would like to talk about taxes, because with Barack Obama, you're going to be paying higher taxes.

But not with me and my fellow maverick. We are not afraid to get mavericky in there and ruffle feathers, and not got to allow that. And also to the great Ronald Reagan...

(END VIDEO CLIP, "SATURDAY NIGHT LIVE")

KURTZ: So, the media critique, it seems to me, is that she was charming, "you betcha," she was folksy but she kind of stuck to her talking points.

Would you disagree with that?

CARPENTER: No. I mean, if you look at how the debate -- she won on style. Joe Biden won on substance. You know, in the age of cable news...

KURTZ: Which is more important?

CARPENTER: ... and there's not fact-checking, I couldn't tell you which one is more important at this point.

KURTZ: Well, here is "Newsweek." It's got Sarah Palin on the cover again. Let's put it up on the screen.

The headline is, "She's One of The Folks, And That's the Problem." And there's this incredible subheadline on the piece which says, "Governing Requires Knowledge and Mindless Populism is Just That, Mindless."

Does this suggest a bit of a lean on the part of "Newsweek?"

CARPENTER: That's a pretty strong word. I don't think it was mindless if you look at her performance in the debate.

There were some talking points, but she did talk fairly passionate about the issues she did know about in terms of energy, reform. I mean, those are her cards. That's why she was picked, for energy and, you know, earmark reform and all that kind of stuff, which strangely was not talked about, except for that dig that Joe Biden gave her about the Bridge to Nowhere, which I though was fairly strange since he voted for it.

Now, this was also the week, before the debate, where we saw more of the second part of Katie Couric's CBS interview with Governor Palin. And there was one answer that I'm still scratching my head over. You've probably seen it once or twice.

Let's watch.

(BEGIN VIDEO CLIP)

COURIC: What newspapers and magazines did you regularly read before you were tapped for this to stay informed and to understand the world?

PALIN: I've read most of them. Again, with a great appreciation for the press, for the media. COURIC: Like what ones specifically? I'm curious.

PALIN: All of them. Any of them that have been in front of me over all these years.

(END VIDEO CLIP)

KURTZ: Now, Dana Milbank, you say that a lot of people haven't seen those interviews. But I think the clips have been replayed so many times, and they're on the Internet, that I wonder if those kinds of answers, or non-answers, in this case, are just making an indelible impression on the public.

MILBANK: It may filter through. I mean, that particular answer, not reading newspapers and magazines, I think hurts us personally in this realm.

KURTZ: Yes. Very wounding.

MILBANK: Very, very wounding. But the truth is, it probably does not hurt her in the public view. And given the way things are in our industry, that probably is rather a common view right now.

I think that they are -- that is part of a deliberate answer of running against the media, as we saw at that campaign. And it's part of this sort of running against the elites.

I mean, I think the most damning quote that Palin gave was actually in the Hugh Hewitt interview when she said, "It's time that Joe Six-Pack is represented in the White House." Well, why is it time for that? I mean, wasn't it the great tradition in this nation that our leaders are better than we are, the very best...

KURTZ: But you have to connect with average people. That's why...

MILBANK: You have to connect with them. That doesn't mean you have to be...

KURTZ: They go eat cannolis at the county fair.

MILBANK: Yes, but that's different from saying, I think the White House should -- the president should be an average person. No, the president should be better than all of us.

KURTZ: All right. Now, Governor Palin did say in a follow-up interview with Carl Cameron of FOX News that she does read "The New York Times," "The Wall Street Journal," "The Economist," and she explains why she didn't do so well with Katie Couric.

Let's take a look.

(BEGIN VIDEO CLIP)

PALIN: OK, I will tell you, honestly. The Sarah Palin in those interviews was a little bit annoyed, because it's like, man, no matter what you say you're going to get clobbered. (END VIDEO CLIP)

KURTZ: Well, she was annoyed by what, by the questions about, "What Supreme Court decision do you disagree with?" These were not "gotcha" questions. And she keeps talking about the filter.

Does she not like answering reporters' questions?

CARPENTER: Yes, I don't think they were "gotcha" questions. But I do wonder when she's asking about, "What newspaper do you read?" You know, Barack Obama sent a text message to say, watch the debates on CNN, and then he got hammered for picking CNN.

So maybe she didn't want to pick one or the other, and wasn't sure, you know, can I be honest about what I'm saying? Am I going to get clobbered? I think she was just too defensive, to be quite honest.

KURTZ: Well, let's -- one more from Tina Fey, because it will give us a question on the other side.

(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")

FEY: Liked being here tonight answering these tough questions without the filter of the mainstream "gotcha" media, with their follow-up questions, fact-checking, or incessant need to figure out what your words mean and why you put them in that order.

(END VIDEO CLIP, "SATURDAY NIGHT LIVE")

KURTZ: So should she now talk to, say, Brian Williams and come on CNN, or is she going to stick to the strategy of talking to FOX News and conservative radio hosts like Sean Hannity and Hugh Hewitt?

CARPENTER: I hope she has press conferences and I hope she goes on every major news network. That's what I'd like to see.

And I do think that her debate performance, you saw at the end she invited Joe Biden to have another one. I think she performed well enough to earn that right, to go and do the press conferences and be a little bit more freewheeling.

KURTZ: But is the McCain campaign going to want to keep putting her out with the MSM, the mainstream media?

MILBANK: I don't think so. I mean, I am flying out to be with Sarah Palin tonight. So I'm hoping for that "Washington Post" exclusive. But I'm not going to put a lot of money on getting it right now. I think she did her -- got her bona fides with the mainstream interviews, and now it's time for Hugh Hewitt and Carl Cameron and the rest of them.

(CROSSTALK)

KURTZ: Dana Milbank not holding his breath.

We had hoped to be joined in this segment by Keli Goff in New York, but we were not able to get her to the studio in time.

When we come back, grading the moderator. Did Gwen Ifill show up the right wing critics who called her biased, or was she too soft on both candidates?

And later, Kathleen Parker, the backlash against the conservative columnist who dared say Sarah Palin is unqualified to be VP.

(COMMERCIAL BREAK)

KURTZ: Gwen Ifill announced months ago that she was writing a book about the younger generation of African-American politicians, including Barack Obama. I wrote about it a month ago.

The day before the VP debate, a right wing Web site called WorldNetDaily, which itself is pedaling an anti-Obama book, charged that this meant Ifill would be a biased moderator. "The Drudge Report" picked up the attack, and on FOX, Dick Morris was calculating how much more money the book would supposedly make if Obama was elected.

(BEGIN VIDEO CLIP)

DICK MORRIS, FOX NEWS CONTRIBUTOR: If she were told, "I will give you a personal bribe of $350,000 if Obama wins," she would go to jail. But instead, she is going to be given royalties for $350,000, zero if Obama loses, and she's allowed to emcee this debate. It's outrageous.

KURTZ: At the St. Louis debate, the PBS correspondent dished it out to both candidates.

(BEGIN VIDEO CLIP)

GWEN IFILL, MODERATOR: The conventional wisdom, Governor Palin, with you is that your Achilles' heel is that you lack experience.

Your conventional wisdom against you is that your Achilles' heel is that you lack discipline, Senator Biden.

(END VIDEO CLIP)

KURTZ: Amanda Carpenter, was the book flap a legitimate issue, and was Gwen Ifill fair in that debate?

CARPENTER: I do think the book flap was extremely legitimate. The fact that it comes out on Inauguration Day was a clincher for me. But she did a fair, fine job. But I do wonder if she was hamstrung a bit from asking any follow-up questions because of the scuffle running up to this.

KURTZ: You see any evidence, even with the book, that Ifill was harder on Palin than she was on Biden?

MILBANK: No. I mean, if there's a rap on her for this, it may have been that she was a little bit gentle on all of them. That may have been the format more than anything else. I mean, and we'll never know, and perhaps she'll never know even whether she was intimidated by what was coming out here. I certainly think that there was an inoculation going on. It turned out not to be necessary since...

(CROSSTALK)

KURTZ: I'm not sure that I would blame it on the format. I mean, it seemed to me that part of her job as the moderator is to pin down the candidates.

She asked very general questions. For example, "What is true and what is false about the causes of climate change?" Rather than, "Governor Palin, you have a record of saying that human activity is not responsible for climate change." And the lack of follow-ups, you know, probably let both candidates slide by in not having to respond to their own records.

MILBANK: And it's hard to know what she would have done had this flap not occurred, but it's tempting to draw the conclusion that she was intimidated. It was obviously on her mind. The first thing she said when she came out on crutches, because she had an injury from falling, she said, "I fell. I wasn't pushed," which is how I think she -- her way of dealing with this whole thing, being defiant about it.

KURTZ: Ifill told NBC this morning that she didn't respond, I guess, on air because she felt that this was a 24-hour flap and part of the campaign.

I mean, here is my feeling. I mean, I think in retrospect she should have told the debate commission that she was writing this book, that Obama would be part of it. So that's fair.

But to criticize her about a debate that hadn't yet happened, on a book that she hadn't yet finished, carried a whiff to me of saying, she's black and she must support Obama. Would a white moderator who was writing a book on, you know, the new Republican Party in the age of McCain have gotten that kind of treatment?

MILBANK: Boy, I mean, it's a heavy charge. You know, I hesitate to make it.

I mean, the mistake there was -- I mean, this may or may not be the age of Obama, but it is the age of full disclosure. So get everything out there just so you avoid this whole kind of flap in the first place. That said, it did seem unfair when it actually occurred.

KURTZ: Right.

Ifill told me in an interview with the Republican (ph) commission that there are too many even fellow journalists who assume that she is pro- Obama because she's African-American. And she's African-American, and I think that's unfair. Before we go, "The New York Times" had a front-page story yesterday about William Ayers, the former weatherman terrorist who has had acquaintanceship in Chicago with Barack Obama. I think it's a legitimate issue, but it's an old issue. It's kind of being rehashed now. Sarah Palin picked up on it yesterday.

Is it fair for the media to bring this up again?

CARPENTER: Well, I think it's Sarah Palin bringing it up on the campaign trail that blows it up even more than just "The New York Times" story.

KURTZ: Well, "The New York Times" gives her an opening.

CARPENTER: It gives her the platform to do it.

From the people I talk to, they do not think this has explored enough. Granted, that's on the conservative side of the aisle. But they don't feel like this story has bubbled up into mainstream news because they are only hearing about it on FOX News and talk radio. And so I think they are probably happy it's finally getting to "The New York Times."

KURTZ: But close to a year ago, you know, every major news organization, including "The Washington Post," including "The New York Times," wrote about who William Ayers was, how he kind of rehabilitated himself in Chicago, and the fact that he had some interaction with Obama, they served on the same board. But here it comes again.

MILBANK: Yes. I mean, and we've had return cameos from Rezko and I believe the Reverend Wright. We'll be hearing from him shortly.

KURTZ: Right. But here's a case where "The New York Times" is brining it up rather than responding to something a campaign said.

MILBANK: Yes, I think so, although I doubt we would be here talking about it right now if it were just The Times and it weren't Palin stirring the pot there. So I think a lot of this is the campaigns trying to, you know, throw things at the wall and see what sticks here. I think that story probably would have been interesting but not noteworthy had they not...

(CROSSTALK)

KURTZ: Well, doggone it, that was a good segment. We've got to go.

MILBANK: You betcha.

KURTZ: Dana Milbank and Amanda Carpenter, thanks for joining us.

Up next, columnist Kathleen Parker drowning in hate mail after urging Sarah Palin to pull out of the race. Has she changed her mind after the debate? That's next.

(COMMERCIAL BREAK) HOWARD KURTZ, HOST: Kathleen Parker is taking plenty of heat these days. She's a nationally syndicated columnist, conservative side of the spectrum, who watched Sarah Palin's interviews with Katie Couric and Charlie Gibson and called for Palin to spare herself further embarrassment by quitting the race.

KURTZ: Here is what you wrote this week: "Allow me to introduce myself. I am a traitor and an idiot. Also, my mother should have aborted me and left me in a dumpster, but since she didn't, I should off myself."

Now, this is all because some readers didn't like what you had to say about Sarah Palin.

PARKER: Some people were very upset. Approximately 11,000 so far, and counting.

Yes, I wrote about Sarah Palin stepping down from the ticket. I felt after her third interview -- I didn't think any of her interviews were very good, but the third was catastrophic -- that she ought to leave the ticket and let McCain try to put somebody else in place to do a better job and help him with maybe the economy.

KURTZ: And for those who missed the column, you said -- this was after one of her encounters with Katie Couric -- "If Palin were a man, we'd all be guffawing. And if B.S. were currency, Palin could bail out Wall Street herself."

So is there a bit of a double standard where she gets more of a pass for her answers where she just couldn't come up with an answer?

PARKER: I think so, yes. I think we're less likely to pick on women, generally.

KURTZ: We hear so much about the sexist media, though.

PARKER: May I say, on the Republican side, you know, we're perfectly happy to pick on Democratic women. But I do think we gave her a pass up front. And when I say "we," I'm just talking about, you know, people associated with the more conservative of the aisle.

And, I mean, really and truly, imagine if a man, a male candidate, were just sort of saying "betcha" and winking, and all of these histrionics that only a woman could do, and yet it's a very unserious way to behave if you're running for vice president of the United States. KURTZ: Let me play for you one sound bite from Governor Palin's interview with Katie Couric. And this was -- you know, everybody's now seen this probably a hundred times, when she was asked about the Supreme Court.

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: Well, let's see. There's - of course in the great history of America there have been rulings that there's never going to be absolute consensus by every American.

(END VIDEO CLIP)

KURTZ: And of course she couldn't name a single example.

Was that part of what made you feel that this woman is not ready for prime time?

PARKER: Not that particular question, because I think a lot of people would have a hard time coming up with, let's see, Supreme Court decisions I disagree with. That's a pretty tough question.

But a much more simple question she was unable to answer, such as, "What do you read? What newspapers do you read?" How hard is that?

You know, you just say, "Well, I read all the big papers, 'The New York Times,' 'The Washington Post,' 'The Wall Street Journal.' Like everybody in the world, I go to Drudge and check the headlines, and I read 'The Weekly Standard' and 'The National Review.'"

Why not just throw a few out there? But it seemed to me - I think what happened was she sort of conveyed that, well, maybe she doesn't read. Maybe she doesn't read anything at all. And it was just such a simple question.

KURTZ: What about the reaction? All those e-mails, all the vitriol directed at you, I mean, that has got to be somewhat depressing. Are you expected because you are on the conservative side of the spectrum to defend any nominee the Republican Party throws out there?

PARKER: Apparently. Apparently so.

I think the reaction to me specifically in this case was there are a number of factors, I think. One was that they very much do not want Obama to win, and so any opinion that seems to give ammunition to the other side is going to cause trouble.

I think another factor is that these people have so over-identified with Sarah Palin as one of us, you know, saying that we're all ordinary Americans, she's like us -- and boy she played that up in a big way in the debate Thursday. She really played her populist card. But I think that they felt insulted personally, so I think that accounts...

KURTZ: Were you not only wandering off the reservation as a conservative, but also as a woman who perhaps some saw as betraying or walking away from this woman, the first Republican woman on a Republican presidential ticket?

PARKER: Yes, I guess a little bit. It's sort of a funny thing for the right to be offended by objecting to the sisterhood, you know, by leaving the sisterhood. But I think most of the comments were more along the lines of -- that I was jealous, that clearly I couldn't stand for a pretty woman like Sarah Palin to be rising to the vice presidency, that probably I should be. And that actually hadn't entered my mind, but...

KURTZ: You have avoided taking this personally, but it's got to be a little frustrating to be beaten up like that for basically doing your job. You're paid to have opinions. You're paid to write a column.

PARKER: Well, of course I am. And I'm not paid by the GOP. I mean, I'm not employed by them. And I have to say what I believe.

I have to -- you know, there's an issue of credibility as well for me. So it was impossible for me to continue cheerleading for Sarah Palin given the evidence we had at the time.

KURTZ: I've got about half a minute. Did Sarah Palin's performance at the debate, which got fairly positive reviews from the mainstream media, cause you to revise your view at all about whether she should be the VP nominee?

PARKER: Sarah Palin I think redeemed herself. I don't think she helped McCain. And I think the question of whether she is qualified to be president has not been answered in a different way. How's that?

KURTZ: In a different way...

PARKER: I don't think anyone who watched her and who then listens to her answers would say, yes, this woman is ready to be president of the United States should circumstances warrant.

KURTZ: Kathleen Parker still speaking her mind.

PARKER: Thank you.

KURTZ: Thanks very much for joining us.

(END VIDEOTAPE)

KURTZ: And coming up in this second half of RELIABLE SOURCES...

(BEGIN VIDEOTAPE)

REP. NANCY PELOSI (D), SPEAKER OF THE HOUSE: ... House Democrats...

KURTZ (voice-over): ... the bailout blame game. How badly did journalists get spun as both parties struggled this week to pass that $700 billion bill?

And moderator on the hot seat. Bob Schieffer on his role in this year's final presidential debate, on how Sarah Palin dealt with Katie Couric, and his own take for shutting down those relentless campaign talking points.

(BEGIN VIDEO CLIP)

BOB SCHIEFFER, CBS NEWS: Howie, sometimes you want to jump across the table and slap them.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

HOWART KURTZ, HOST: When Sarah Palin and Joe Biden squared off this week, one man was watching with special interest. Bob Schieffer, the host of "Face the Nation," will be moderating the third and final debate between Barack Obama and John McCain 10 days from now. So we called in the veteran CBS newsman, who is also the author of a new book modestly named "Bob Schieffer's America," and I spoke to him earlier here in Washington.

(BEGIN VIDEOTAPE)

KURTZ: Bob Schieffer, welcome.

BOB SCHIEFFER, CBS NEWS ANCHOR: Thank you, Howie.

KURTZ: Let's go straight to the videotape, as they say in television. Sarah Palin at the debate on Thursday night.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN, (R) VICE PRESIDENTIAL CANDIDATE: I like being able to answer these tough questions without the filter, even, of the mainstream media kind of telling viewers what they've just heard.

(END VIDEO CLIP)

KURTZ: The filter of the mainstream media? It sounds like she's talking about your colleague Katie Couric.

SCHIEFFER: Well, I don't know what she was talking about, but I think she made a very good account of herself last night. I'll tell you one thing, she made a lot better sentences than she did when she was talking to Katie Couric.

KURTZ: And that raises the question of -- you know, look, there's been a lot of complaining by the McCain campaign about the kind of questions she's been getting in these interviews. But in your view, was Katie Couric out to embarrass her or ask her something she didn't think she could handle -- you know, "What Supreme Court decisions did you disagree with?"

SCHIEFFER: Or, "What newspapers do you read?" I thought the questions were completely appropriate. I thought Katie's demeanor was exactly what it should have been. She was courteous but she was poignant.

She asked questions, and Sarah Palin had a lot of trouble answering them. For whatever reason, she just seemed to be unable to answer a series of questions on a variety of issues. And I think she, you know, sort of rehabilitated herself during that debate.

KURTZ: Now, was that in part because, unlike in an interview, I'm talking to you, you say something, I follow up, "Wait a minute, Bob, you said this last week and how do you square that?" we didn't see a lot of that from Gwen Ifill in that debate. The structure of the debate maybe doesn't allow for as many follow-up questions.

So is that an easier format for a candidate like Governor Palin to slide by?

SCHIEFFER: I think it wound up being that. The other debates, the presidential debates, the one that I'm going to moderate, the last one on October 15th, were divided into nine-and-10-minute segments. It's my understanding that in order to cover more subjects, they divided this into five-minute segments, which really didn't leave much time for follow-up.

I hope in the presidential debates to follow that we'll have more time for follow up. I'm going to try very hard to do that.

KURTZ: Do you think Sarah Palin and Joe Biden should have been challenged more when they gave their answers even if, for example, climate change, Governor Palin said it didn't matter whether man had caused it, but even though she was on record in the past as saying she did not believe human activity is responsible?

SCHIEFFER: I think it's kind of up to the candidates to make the debate, you know? And that's what I hope when we get to this presidential debate that I'm doing we'll be able to do.

I mean, I'd be happy if you never heard from me after I asked the first topic sentence. I am going to encourage them to question each other. We'll have time to do that, and I thought...

KURTZ: But Jim Lehrer tried to do that and he wasn't totally successful. So when you're out there -- I mean, you know, you're the third person on the stage10 days from now at Hofstra University. And if they duck the question or if they talk around the question, do you feel it's your role to get in there and say, "Just a minute, Senator Obama, Senator McCain"?

SCHIEFFER: I think it is my job to give as good an account or as good of a picture of these people as I possibly can for voters to make their choices. That is what I'm going to try to do.

KURTZ: But you know what it's like from being the moderator of "Face the Nation." I mean, they've got their talking points and they've got their one-liners. SCHIEFFER: Oh, Howie, sometimes you want to jump across the table and slap them, but that's probably not a good thing.

KURTZ: And you're not planning on doing that in the third debate?

SCHIEFFER: I have no plans at this time.

KURTZ: This is hardly your first effort at moderating. In fact, you were the moderator of the last presidential debate four years ago -- President Bush, John Kerry.

I want to play a question that you asked at that time.

(BEGIN VIDEO CLIP)

SCHIEFFER: Both of you are opposed to gay marriage, but to understand how you have come to that conclusion, I want to ask you a more basic question. Do you believe homosexuality is a choice?

(END VIDEO CLIP)

KURTZ: Why did you ask that?

SCHIEFFER: Because I thought it was the basic question, and I had been trying to frame a question in my own mind to talk about gay marriage, about "Don't Ask, Don't Tell" in the military, and it seemed to me it all came down to that. How you come down in that question gives you a good idea of how candidates would feel on all of the other issues that come up.

It's not a bad question to ask John McCain and Barack Obama this time around. In fact, I was sort of thinking about, I might find a way to ask that one again.

KURTZ: Well, they might be watching, so perhaps you have just put them on notice.

Now in that 2004 debate, John Kerry famously invoked Vice President Cheney's daughter Mary, and then that dominated the coverage of the debates afterwards for two, three, four, five days.

SCHIEFFER: Yes.

KURTZ: So did you realize at the time that that was going to be the headline, so to speak?

SCHIEFFER: No, I had no idea, but I thought if we could get an answer to that -- and I don't know if you remember, George Bush said, "I just don't know, but I think we ought to be tolerant of other people's feelings."

I thought for someone who came down on his side of the issue, that he gave the right answer. I think John Kerry gave an excellent answer for someone who believes the other side of that. But I think when he mentioned Dick Cheney's daughter, maybe he took it a step too far, and then it became just a whole political picture. KURTZ: Yes. Do partisans on both sides lobby you, suggest questions, hey, you ought to ask this, send you e-mails and that sort of thing?

SCHIEFFER: Oh yes. I got from one organization, I got 12,000 questions the last time. And I'm going to make an open confession here, Howie. I didn't read them all, but I read some of them, and there were some good ones in there.

KURTZ: You've known John McCain a long time, he's been a guest on your show, and you've interviewed him as a Capitol Hill reporter. Are you surprised at all the way that he and his campaign are going hard after the press when he used to joke about it being the base?

I mean, they have criticized -- "The New York Times," "Newsweek," "The Washington Post," "USA Today," MSNBC. Any of this surprise you?

SCHIEFFER: Yes. I was a little surprised by it. I'd like to think that maybe it's not McCain himself, but some of those around him. But I was surprised at the way they took on the media, but, you know, we're the default position.

KURTZ: And it's a tough game. and we have to be able to take it as well as dish it out.

SCHIEFFER: Yes. Sometimes they're even right.

KURTZ: In your book you have a lot of the commentaries that you do at the end of your show. I thought I would read a couple.

If we can put the first one up on the screen about campaign ads.

You write that -- you said on the air, "Campaign ads have been dumbed down now to the level of professional wrestling, the difference being that wrestling is occasionally funny. Are the ads effective? I can't imagine anyone taking them seriously."

But the campaigns spend a lot of money on these ads, as you know.

SCHIEFFER: Well, it's hard for me to imagine, but they do seem to work in the short term. If they didn't work, these candidates wouldn't run them, wouldn't pay the money it takes to produce them. They do seem to run in the short term, and I think they not only hurt campaigns in general, but they hurt the whole governing process.

Sometimes, you know, people like to say the ends justify the means, but sometimes the ends are reflected in the means. And I think these things have hurt our campaigns.

KURTZ: One of my favorite Schieffer commentaries from last year, you said, "I have let you down. I think it's best just to admit it and move on. 'Face the Nation' did not get the big interview with Paris Hilton. I feel terrible about it."

SCHIEFFER: Well, I ended that by saying, "And the reason I didn't ask her, I couldn't think of any question I wanted to ask her so I didn't ask her." So I didn't ask her. But, you know... KURTZ: But it would be good for your ratings, Bob.

SCHIEFFER: I want to tell you, when she made that ad, the parody about old white-haired dudes, talking about John McCain, I kind of decided, maybe she ought to run for something. I thought it was one of the funniest ads of the campaign.

KURTZ: Maybe now there's an excuse for you to have her on "Face the Nation."

All right. Last question. I've got about half a minute.

In terms of your role, you know, it's going to be in your hands, the shape of that debate. You've been in this business a long time. Is that a lot of pressure?

SCHIEFFER: Yes. I mean, before the other one I actually got butterflies for about the first time in 25 years. But it's also fun, and, you know, it's the big game, and if you like the game, you want to be in the big game. So I'm really looking forward to it.

What a campaign. I wouldn't have missed this for the world.

KURTZ: Bob Schieffer getting ready to suit up once again.

Thanks very much for joining us.

SCHIEFFER: Thank you, Howard.

(END VIDEOTAPE)

KURTZ: And after the break, congressmen point fingers, the stock market plunges, and journalists try to penetrate the fog on that huge federal bailout bill.

Plus, Bill O'Reilly practically shouts down a top House Democrat. Is that fair and balanced?

(COMMERCIAL BREAK)

HOWART KURTZ, HOST: When Congress votes on some piece of legislation, say health care or education, it usually takes months or years to find out if the law had any impact, if indeed the media ever bothered to check up on it. But that was hardly the case on Monday, when the House voted down the federal bailout bill that had been backed by President Bush and the leaders of both parties. No sooner were the votes tallied than the stock market began to plummet.

(BEGIN VIDEO CLIP)

KYRA PHILLIPS, CNN ANCHOR: The House of Representatives rejecting a $700 billion plan to bail out the financial system.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: It's now almost down 600 points.

RICK SANCHEZ, CNN ANCHOR: Down to the 542s.

UNIDENTIFIED MALE: Down about 603 points.

WOLF BLITZER, CNN ANCHOR: We are seeing the markets down 656 points.

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: This is unbelievable. We have not seen numbers like this before, 735.63 points, a loss on the Dow.

(END VIDEO CLIP)

KURTZ: Ouch.

Well, joining us now, Ed Henry, CNN White House correspondent who spent a lot of time on Capitol Hill. And in Nashville, Jonathon Martin, senior political reporter for The Politico.

Ed Henry, it's Monday. You're alive. Republicans are saying they voted against this bill because Nancy Pelosi gave a partisan speech. Democrats are saying that's ridiculous, only a third of House Republicans voted for the measure.

How do you decide who is right?

HENRY: Well, I think in that case, one clear thing was the math. There were 133 House Republicans who voted against it. I think the number was 95 House Democrats that voted against it. Clearly, there were more Republican "No's," and this was a bill pushed not just by the Democratic leadership, but their own Republican president. President Bush clearly did not have the juice at the beginning of the week to get it done, and neither did John McCain.

KURTZ: And were you conscious of the fact that, you know, every 10 minutes the market was down?

(CROSSTALK)

HENRY: Yes. I mean, you're looking at that clock and it's sort of in real time the Dow is going down. Of course, the next day it went up. So, you know, nobody really knows.

But by the end of the week, John McCain and the president sort of got a victory. So you have to -- the week started pretty badly for the Republicans, but by the end of the week they got a pass.

HENRY: We'll come back to that.

But Jonathan Martin, why did journalists -- why were so many of them so surprised that the bill failed on Monday? Did they spend too much time listening to the White House and Henry Paulson say the sky was going to fall?

JONATHAN MARTIN, SR. POLITICAL REPORTER, POLITICO: You know, Howie, I think there was great coverage of the story from the business angle. I think where there were shortcomings, we're not necessarily covering the grassroots rebellion that was taking place across the country that led these House members, especially in vulnerable districts, to oppose the bill initially on Monday.

These offices were flooded with e-mails, phone calls, letters telling their members to vote "no," and not until after the vote was there the kind of reporting, detailing, the pushback that actually constituents sent over to members of the Congress. We didn't really have an appreciation for the full scope of that until, oh, my goodness, they voted no.

KURTZ: And the media did seem to me to be slow to pick on the degree of public anger toward this package and the perception that it was rewarding reckless Wall Street tycoons who had gotten themselves into this mess.

HENRY: I think you've got to credit CNN's Lou Dobbs, who was ahead of the curve on that. Maybe others were not because it was sort of -- maybe there were assumptions made that there was going to be support for it because there was such a financial crisis. But Lou and others did point out, look, this is bubbling out there, as Jonathan points out.

And I don't even think it's fully -- we fully realize the potential opposition out there. Even though it's passed now, it doesn't mean that anger out there is still not there. People still think this is a bailout for fat cats.

MARTIN: I think the best comparison, Howie, is to the immigration bill in the spring of 2007. Intense conservative opposition across the country, and a real division between conservative elites and the conservative grassroots.

KURTZ: Right. But let me jump in here...

MARTIN: Yes, sure.

KURTZ: ... and ask you about it, because presidential politics obviously intertwined with this.

John McCain made a great show of saying he was going to get involved in the negotiations. He almost skipped the first debate. But when the bill failed on Monday, the press didn't blame him for that.

Why not?

MARTIN: Well, I think because he was not totally invested in the bill. He and Obama both tried to sort of not be totally tied to it. And so I think that there was some blame given to him, but not a ton.

Look, the fact of the matter is, is that it underscored how little juice not just John McCain had, but President Bush and the entire Republican establishment. Bush, Boehner, Blunt, the House leadership, McCain, they were all on board. These rank and file members in the House caucus just didn't care. They are looking after their own political hides 30 days out from Election Day.

HENRY: And I would challenge your premise a little bit, Howie. I think, speaking for myself -- you played that one short clip of me, but that time, real time with Kyra Phillips, we were saying, in fact, that John McCain was taking a hit for this and we reported that Monday and Tuesday. But in fairness to John McCain, we do have to point out that by the end of the week, it did get through the Senate and the House.

And so, you know, it was sort of short-term pain for him. It showed how he's having trouble on the economy.

KURTZ: What about...

HENRY: But he did come back.

KURTZ: What about the coverage of Barack Obama? The McCain spin is that Obama stayed on the sidelines, though he did make some calls to Democratic members of Congress, and of course the thing passed. But it seemed to me the media didn't call Obama on the fact that he was taking a backseat role. Or maybe that was the appropriate role.

HENRY: Well, I mean, that's -- you've got to kind of let that sort out. It looked like for John McCain taking a front seat role was not exactly working out. Now, was that just raw politics, or is that the smart thing to do?

The bottom line is that Barack Obama, by maybe sitting on the sidelines, actually seemed to let this play out and not get mired in the Washington back-and-forth. John McCain, who always says he wants to step back from that, got in the middle of it, and it hurt him of first.

KURTZ: Jonathan Martin, the coverage -- let me jump in here. The coverage of this, the front page of "The New York Post," the day after the bill went down Monday, was all about the pork in this bill. We see it up there, "Oink! Oink!"

Wooden arrows for kids, movie productions, companies in American Samoa, about $2 billion in tax breaks, I didn't see much about that, didn't hear much about that on television until "The New York Post" weighed in. Why not?

MARTIN: You know, I was surprised about that, too, especially given how much prominence that topic got in the first debate last week in Mississippi. This was a sort of obsession of John McCain's, Howie.

I think because they are just so consumed with this story and this sort of business angle, and also now the political angle of the story, that that sort of fell by the wayside. But I think it presents a great opportunity to sort of -- for John McCain to talk about what's wrong with Washington when you have got this emergency bill and you have got these sort of extraneous things...

(CROSSTALK)

KURTZ: Well, he did vote for the bill. But a grab (ph) for journalists, I think, to pick apart these bills and show where the money is really going. All right. Now, a player in the debate was House Banking Chairman Barney Frank. Bill O'Reilly had Frank on his show this week. He had already called for Frank to step down as the committee chairman.

He played a clip from just this past July in which Barney Frank said of Fannie Mae and Freddie Mac, now seized by the government, of course, "They were fundamentally sound and not in danger of going over."

And then this happened...

(BEGIN VIDEO CLIP)

BILL O'REILLY, FOX NEWS: But going forward we're going to be swell. Look, from August '07 to August '08...

REP. BARNEY FRANK (D), HOUSE BANKING CHAIRMAN: Well...

O'REILLY: Don't -- look, stop the BS here. Stop the crap!

From August '07 to August '08, under your tutelage...

FRANK: You know, here's the problem going on your show...

O'REILLY: ... this industry...

FRANK: The problem going on your show...

O'REILLY: ... declined 90 percent. Ninety percent.

None of this was your fault, oh, no. People lost millions of dollars. It wasn't your fault. Come on, you coward! Say the truth!

FRANK: What do you mean coward?

O'REILLY: You're a coward! You blame everybody else!

FRANK: Here is the problem with going on your show. You start ranting. And the only way to respond is almost to look as boorish as you.

I think though there is a broader point here, and maybe the theatrics overshadowed it, is that the Democrats are going to face some tough questions in the days ahead for their ties to Fannie Mae and Freddie Mac. Maybe shouting at them is not going to get the right answers, but they're going to have to answer some of those questions.

KURTZ: Let me go to Jonathan.

Frank did finally make the point that he passed the bill to tighten the regulations a couple months after becoming chairman. But was O'Reilly holding him accountable there, or was he just doing it rather loudly?

MARTIN: Well, I think it's probably both. I mean, I think it's good theater and it's the kind of stuff that makes, you know, fodder for this kind of show here.

And look, that's what obviously sells on cable news. But I think a lot of Americans are probably losing the point there and are only paying attention to the shouting and the references to "coward," et cetera, et cetera, but...

KURTZ: All right. I'm not going raise my voice, but we are out of time.

Jonathan Martin, Ed Henry, thanks for joining us.

Still to come, remember that bizarre O.J. burglary case? Why most of the media took a pass this time around.

(COMMERCIAL BREAK)

KURTZ: How can this be? How can O.J. Simpson be facing up to life in prison after a trial that barely made a blip on the media radar screen? The same O.J. whose double murder trial more than a dozen years ago was carried live for months on CNN? The same O.J. whose verdict in the civil trial over those killings shared split-screen space with President Clinton's State of the Union?

The case in which Simpson tried to seize his old sports memorabilia at a Las Vegas hotel was completely overshadowed by the presidential campaign and the federal banking bailout. Yesterday morning's conviction on robbery and kidnap charges, which didn't make many front pages today, just didn't seem to stir up the old racially-tinged passions that once convulsed the country.

Maybe there's too much important news right now? Or maybe, thankfully, we've all just moved on.